Barriers and Drivers to Future Bank Adoption of Mobile Banking: A Stakeholder Perspective

Jennifer Mullan, Laura Bradley, and Sharon Loane

Mobile Banking

Mobile banking originally became topical in the late 1990s. However, it was not until the advent of the Wireless Application Protocol (WAP), enabling Internet access from mobile devices (mobile web), that interest was more widely sparked. Banking was one of the first services applied to the mobile web. Due to issues relating to security, limited service provision, expensive mobile phones, technology limitations and low customer demand, coupled with a lack of full commitment from banks, WAP-based mobile banking failed to fulfil its promise and many banks withdrew their services by the early 2000s.

J. Mullan (h) • L. Bradley • S. Loane Ulster University, Derry, Northern Ireland e-mail: This email address is being protected from spam bots, you need Javascript enabled to view it

© The Author(s) 2016

B. Batiz-Lazo, L. Efthymiou (eds.), The Book of Payments, DOI 10.1057/978-1-137-60231-2_27

Low customer adoption rates were compounded by banks themselves as they were thought to have employed mobile banking as a defensive marketing strategy, expecting online customers to move easily to the mobile platform, without giving consideration to the reasons why, and how, customers would use it. As a result, this situation did not materialise and failure ensued.

Mobile banking is considered an m-commerce service, differentiated from e-commerce, as a result of personalisation potential and access to anytime anywhere services. It is an example of a convergence service, merging the financial services and telecommunication industries, which were previously unrelated. Interestingly, diffusion of m-commerce is considered to follow a different path to e-commerce. Often the origin of both technologies is considered to influence this path, with e-commerce originating in the USA, as opposed to m-commerce, which originated in Japan. Mobile banking is typically characterised by wireless, remote communication between bank and customer via a mobile device. Unlike other channels mobile banking has multiple modes of access—SMS, browser and mobile apps—further compounding the complexity of understanding this innovation. Multiple benefits exist for customers and banks. Customer benefits include ubiquity, flexibility, convenience, privacy and mobility as regards anytime anywhere banking. “Mobility” is achieved by the ability to access banking services, 24 hours a day, independent of geographic location. Banks perceived benefits range from opportunities to cross-sell, potential to acquire new customers, cost reductions and increasing customer faction through the provision of personalized services. Most importantly, mobile banking is thought to strengthen the bank, as customer relationships are improved banks are seen to meet customer needs via mobile banking provision, thereby increasing customer loyalty. An important issue that academics and the industry have highlighted is just how willing customers are to change banks if mobile banking is not available. By ignoring mobile banking, banks may possibly face higher costs and lose customers. Globally, the majority of banks provide some form of mobile banking but, despite the clear benefits for banks and customers, to date it still remains at an early stage of adoption.

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